TUE AM News: New development can combat local governments’ financial challenges

May 12, 2026

— New residential and commercial development can help address financial challenges faced by local governments in places like Jefferson County, according to the latest Wisconsin Policy Forum report.

New construction can directly boost county and municipal revenues by increasing how much local officials can raise property taxes under state law, per the report, as well as expanding the tax base paying into local governments’ coffers.

Jefferson County has lagged behind the state in development since 2015, with new construction rates between 0.7% and 1.8%.

That has limited property tax growth and forced the county and other local governments to tighten their belts.

“Jefferson County in theory has strong opportunities for development,” the report’s authors note, citing its placement along the Interstate 94 corridor between Madison and Milwaukee. “In practice, that has not materialized.”

But if the county had a new construction rate of 2% – equivalent to over $240 million annually – it would have generated an additional tax levy of $8.4 million since 2017 without additional impact to property owners.

The report notes that while this is a “very difficult task today,” the county posted rates of net new construction between 2.4% and 3.3% between 2000 and the 2008 housing crisis. Counties such as La Crosse and St. Croix have at times posted construction rates close to or exceeding 2% since 2015.

Municipalities in Jefferson County would see a similar boost to their tax base, as well as benefit from increased revenue from impact fees and special assessments. The county could also see a boost to its sales tax revenue.

School districts could indirectly incur benefits from new residential development, since more housing could draw more students to the district and increase the state aid received by schools. Area technical colleges would also benefit since state aid for tech college districts is tied to net new construction.

The report finds that new local costs generated by this infrastructure would not exceed local revenues.

However, the report’s authors warn that development “is not by itself a panacea for the financial challenges faced by local governments and schools,” noting that the state has limited revenue and spending for local governments despite rapid inflation.

“Your costs are going to grow more than your revenues are allowed to grow, and over time that’s going to become more and more difficult to address,” senior research associate Tyler Barnes told WisPolitics.

While the report focuses on Jefferson County, the authors note that the county’s mix of urban and rural areas serves as an “effective stand-in” for communities facing similar fiscal challenges across the state.

Still, Barnes said, not all communities may be able to stimulate the kind of growth discussed in the Forum report, particularly rural counties where the population is currently declining.

“Wisconsin’s population is not growing all that rapidly, so there are a lot of places that are going to be facing that pressure, regardless of what local government policies are,” he said.

— Democratic lawmakers have offered a lukewarm response to a $1.8 billion surplus spending deal negotiated by GOP legislative leaders and Gov. Tony Evers.

Evers yesterday announced details of the deal he reached with Senate Majority Leader Devin LeMahieu, R-Oostburg, and Assembly Speaker Robin Vos, R-Rochester. The Assembly and Senate are both expected to vote on the measure Wednesday.

The deal would pump surplus funds into school aid, property tax reductions and rebates for Wisconsinites, as well as eliminate state income tax on tips and overtime pay.

A Legislative Fiscal Bureau analysis of the bill shows it includes:

$870 million to provide one-time payments of $600 for married joint filers and $300 for individuals.
$315 million to boost reimbursements for special education costs. LFB projected that would up the reimbursement rate to 42.7% in 2025-26 and 50% in 2026-27, though those rates would change depending on how much districts sought from the state to cover their costs.
$16.3 million more in per pupil payments for pupils participating in the choice, charter, special needs scholarship, and open enrollment programs because of the increase in special education funding.
$302.5 million for a new school aid beginning in 2026-27 that would drive down the property taxes that districts collect. According to LFB, it would amount to about $387 per student.
$50 million to reduce property taxes collected by the state’s technical colleges.

The deal would spend the bulk of the $2.5 billion surplus the Legislative Fiscal Bureau projected in January.

The price tag would be offset somewhat with new projections from the Evers administration that tax collections could come in $300 million to $350 million higher than the January projection.

Senate Majority Leader Dianne Hesselbein dismissed the deal as coming from “three men who will not be in elected office next year.”

Some Dem guv hopefuls also had negative views.

— The latest episode of WisBusiness’ “Talking Trade” podcast features a discussion on tariff uncertainty from an April 22 event, part one in a three-part video series.

“Talking Trade” hosts Sandi Siegel and Ken Wasylik joined Carroll University professors Alexandra Sielaff and Lilly Goren at Carroll University on Earth Day to talk about the impact of President Donald Trump’s trade policies over the past year.

In part one, panelists overview changes in the Trump administration’s tariff policy and how businesses have been affected.

See a WisBusiness story on the event here.

— Ryan VanGrack, the vice president of legal and head of litigation for Coinbase, says the U.S. Supreme Court will likely decide the ongoing feuds between states like Wisconsin and prediction markets.

“Ultimately, they’re suing based on a fundamental misunderstanding,” VanGrack told WISN 12’s “UpFront,” produced in partnership with WisPolitics. “They are presenting these issues as being whether these markets are regulated by a state regulator or no regulator, but that actually has it backwards. These are already being regulated by a federal regulator.

“The key question is, should these markets be overseen by a federal national regulator, or should they be overseen by a patchwork of state-by-state rules and regulations?”

Attorney General Josh Kaul recently sued prediction markets like Coinbase and Kalshi, accusing the platforms of “flouting Wisconsin law” and facilitating illegal sports betting in the state.

“He’s wrong because Congress already answered this question long ago when it assigned authority in this space to the Commodity Futures Trading Commission, a federal regulator,” VanGrack said. “And we continue to advance that point because we believe customers are best protected when you have clear and uniform rules regardless of where you live.”

Meanwhile, Kaul says he’s “certainly aware” of the position of Wisconsin’s tribes when asked if he was pressured to sue prediction markets after Gov. Tony Evers legalized online sports betting through the tribes.

“We received a letter at one point, and there’s a suit going on involving Ho-Chunk Nation, I believe, but we make our decisions in cases like this based on the facts and the law,” Kaul said. “That’s what we did here, and this case will move forward in the courts, and ultimately that’s where the resolution will be.”

He also said there was nothing unusual about the timing of the lawsuit he filed.

“I think it’s not an accident that when there has been this proliferation of online, what we allege is online sports betting, that has led to both legal action and also to debate in the Legislature,” Kaul added. “But I think that’s why you’re seeing both of these unfolding around the same time.”

The Commodity Futures Trading Commission is now suing the state after Wisconsin’s initial lawsuit. The CFTC argues the federal government has sole authority over prediction markets.

“States have been regulating gambling throughout the history of our country, and the position that some of these companies are taking, and now the federal government is taking too, is that this federal agency can come in and basically override states’ gambling laws, even though the law they’re saying that’s based on, which passed in response to the Great Recession, was designed to address the things that caused the Great Recession,” Kaul said.

“Somehow, they want people to believe that there was no debate at the time over this massive change in what the federal government’s authority is. We’re arguing that that’s not correct.”

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